Initiative to fuel business startups in Iowa
Its objective is to link entrepreneurs with needed resources.
12:17 AM, Dec. 13, 2011 |
Written by
MARCO SANTANA
Start Up America
LAUNCHED: In early 2011
MISSION: To encourage young companies and provide a means to create jobs in the U.S. The organization focuses on companies less than five years old because they traditionally account for most of the country’s net job growth.
IOWA’S ROLE: Iowa is the eighth state to join the initiative. An office will open in downtown Des Moines.
The effort to build and grow new businesses in Iowa gets a boost today with the launch of StartupIowa, a statewide initiative that will create one large umbrella of organizations that aim to help entrepreneurs.
Business incubators, accelerators and research parks are scattered across the state, and there are a wide array of professional organizations and networking events. But business leaders say connecting startups to resources has been a challenge. Leaders hope StartupIowa raises the visibility of those available resources.
Christian Renaud of Startup City Des Moines, an incubator for tech companies, said StartupIowa could go a long way toward smashing the image some Iowans have of startups.
“It’s a stigma. It is not part of our cultural fabric here like it is at other places,” he said. “Here, they ask, ‘Is that English?’ That will change over time, but right now, when people hear (startup), they don’t understand what you are talking about and it comes with a negative connotation.”
Debi Durham, the head of the Iowa Economic Development Authority, said nurturing the startup community will lead to job creation.
StartupIowa “will connect the dots and bring all of the resources entrepreneurs need to bear,” she said. “We are trying to foster it and bring attention to what we are trying to do on the state level. As you go across the state, there is not a region that does not have some sort of innovation as part of its growth plan. It’s really exciting.”
The announcement will come immediately after a ribbon-cutting ceremony for Startup City Des Moines’ downtown office. Expected at the event are officials from the Startup America Partnership, which promotes startup culture across the country, including President and CEO Scott Case. The state will be the eighth to announce the formation of a startup-centered initiative.
While the national link should bring awareness, Renaud stressed that it would most likely mean very little financially.
“It is not going to be a conduit for venture funding,” he said. “It will cut through a lot of the red tape that prevents us from being able to easily start up businesses.”
Timing is right, supporters say
StartupIowa backers say the state’s startup ecosystem is ripe for a cooperative effort such as theirs. The Legislature this year reauthorized angel investment tax credits, which make available up to $2 million annually in tax credits to those who invest in startup companies.
Durham said the angel tax credit is only the beginning of how the state could encourage innovation. She said entities like the Iowa Innovation Corp., a nonprofit board established by the state, could help some entrepreneurs get through the early stages of a business through seed money and other assistance.
“Companies at that first initial level of funding, it’s essentially a valley of death,” she said. “No banks, no state government will play because the risk is strong. This is a great way for the state to use its resources to leverage money from the private sector.”
StartupIowa will highlight the efforts of incubators at Iowa State University and in West Des Moines and other cities.
“We are not trying to replace any of that,” Renaud said. “We are trying to provide guideposts for these ‘launch-epreneurs’ so they know what is available.”
In early 2011, Startup America Partnership was launched to encourage young companies and provide a means to create jobs in the U.S.
The organization focuses on companies less than five years old because they traditionally account for most of the country’s net job growth.
The first initiative, Startup Illinois, formed in May and has resulted in much more collaboration, said Howard Tullman, president and CEO of Tribeca Flashpoint Media Arts Academy in Chicago. Tribeca is a two-year college that offers vocational training for 600 students interested in digital media.
“I have seen more instances of people working collaboratively and sharing information,” he said. “It has been a good way for people to get together and exchange ideas. We have seen an uptick in terms of encouraging young startups and having people feel there are resources available they might not have otherwise found.”
That is exactly what officials with StartupIowa hope happens here. Entrepreneurs will have what amounts to a one-stop shop for resources.
Curt Nelson, president and CEO of the Entrepreneurial Development Center in Cedar Rapids, said StartupIowa can mean only good things for the state’s economic future. The eight-year-old accelerator offers mentoring for businesses.
“All businesses start somewhere, and they get started by an entrepreneur at some point. The need from an economic development standpoint is for those entrepreneurs to be constantly nurtured, fertilized and grown,” he said. “It is essential for the economy.”
Nelson pointed out that farmers long ago established Iowa as an innovative flashpoint in the country.
“Iowa built its roots in entrepreneurship,” he said. “When you look at the family farm, companies like John Deere were built out of the needs for farming implements.”
Capital sees burst of new activity
The formation of StartupIowa comes as Des Moines is seeing more entrepreneurial activity. Startup City Des Moines, which launched in October, hosts seven startups at its tech incubator. A stretch of Sixth Avenue downtown has been unofficially renamed Silicon Sixth because of the high density of tech-based startups. Dwolla, a cash-based online payment service, continues to make waves nationally.
Renaud said those successes will bring more exposure for those that continue to fly under the radar.
“The coasts do not have a monopoly on smart people or great ideas or money,” Renaud said. “We have a lot of great stuff going on here. Iowa needs to realize how much (great work) it has going on.”